monday.com Ltd. (NASDAQ:MNDY) is one of the Trending AI Stocks on Wall Street. On August 21, KeyBanc analyst Jackson Ader reiterated an Overweight rating on the stock with a $330.00 price target.
The rating affirmation follows a period of volatility for Monday.com’s shares, with concerns regarding potential weakness in European markets and revenue growth causing a major drop at the end of 2024 and into 2025.
While there were fears that revenue guidance for 2025 may end up coming in around the low 20’s%, shares shot up 26.5% after revenue growth guidance ending up being set at 26%.
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“Was the guidance cut from the usual Monday cloth? Was there still 3-4% of upside left in the tank or was this guidance set with a tinge of aggression or even retribution against the performance in shares driven by downside rumors? We cited three primary areas where revenue could outperform in a note from February (net dollar retention, sales productivity, and ~3% CRM growth upside) and admitted then that things were a little skinny.”
The firm’s analysis indicates that monday.com’s core Work OS product, an AI-first cloud-based platform that functions as a centralized workspace for teams, has accelerated over the past six months. Meanwhile, growth in new products has slowed. This implies that current guidance relies on continued Work OS acceleration.
“Reset in shares are overdone; we feel more than compensated for the risks Now, six months and just a couple of points of upside later we’re once again looking to what is baked into the 2H and where we might see some risks and opportunity . We believe Work OS has accelerated nicely in the last six months, while new products have slowed. Further, guidance seems to imply these trends will continue putting pressure on Work OS to continue to accelerate (a risk) but being less reliant on new product growth to fill the gap (an opportunity).”
monday.com Ltd. (NASDAQ:MNDY) develops software applications globally, offering a cloud-based Work OS for creating work management tools.
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